McConnell Proposes Tax Compromise

WASHINGTON - The top Senate Republican on Thursday sought to break a year-end impasse over extending a payroll tax cut for 160 million Americans, an issue that has deeply divided his party and raised the risk of an economic downturn in 2012.

Mitch McConnell urged fellow Republicans in the House of Representatives to drop their opposition to a Senate-passed bill that extends the payroll tax cut for two months while speeding up President Barack Obama's decision on a controversial oil pipline project between Canada and the Texas Gulf Coast.

Simultaneously, McConnell urged Democratic Senate Majority Leader Harry Reid to appoint negotiators to work on the longer-term deal demanded by House Republicans. Reid has so far refused to reopen negotiations on the Senate bill.

"House Republicans sensibly want greater certainty about the duration of these provisions, while Senate Democrats want more time to negotiate the terms," McConnell said in a statement. "These goals are not mutually exclusive. We can and should do both."

There was no immediate comment from the Democrats or the White House.

McConnell's statement broke a nearly week-long silence on the House Republican opposition to the bill he negotiated with Reid. It came just moments after the top Republican in Congress, John Boehner told reporters he was standing firm in his demand for a one-year extension because it would create greater certainty for workers and businesses.

OBAMA REBUFFS BOEHNER REQUEST

Republican senators, leading conservatives and Republican presidential contender Newt Gingrich are pressuring House members to compromise amid fears the party could face a voter backlash in 2012 if taxes go up.

In a phone call with Obama on Thursday, Boehner said a one-year deal was still possible before the payroll tax cut expires on Dec. 31 and asked the president to dispatch his advisers to Capitol Hill so a deal could be forged.

Obama, who had called the speaker on Wednesday to urge him to support the 60-day fix, declined Boehner's request, an aide to Boehner told Reuters.

House members, after initially expressing skepticism about extending the tax cut at all, are now demanding the $120 billion one-year extension, despite the fact that both parties have been unable to agree so far on how to pay for the full year.

If Congress fails to get a deal by Dec. 31, Americans will be hit with a $1,000-a-year tax hike on Jan. 1. Economists warn that could deal a blow to the country's fragile economic recovery and make it more susceptible to a recession.

In urging House Republicans to back the Senate bill, McConnell said the Keystone XL pipline provision would lock in thousands of new jobs. Obama has delayed a decision on the pipeline until 2013 while alternative routes are studied for environmental reasons.

TransCanada's pipeline would feed some 700,000 barrels of day of crude from Canada's oil sands to Texas refineries.

WASHINGTON - The top Senate Republican on Thursday sought to break a year-end impasse over extending a payroll tax cut for 160 million Americans, an issue that has deeply divided his party and raised the risk of an economic downturn in 2012.Mitch McConnell urged fellow...